Focus: Friend or foe of the law firm?

Is Law a unique sector, industry, call-it-what-you-will? Lawyers certainly like to think so, but many vehemently deny this.

Law is just a service industry like any other, they say. It behaves like any other or will, in time, be forced to, whether it likes it or not.

Except… except… there is one good reason to consider Law as being unique, and that is in its interface with the client.

Consider this: if you are a law firm acting for a small corporate in the UK, say, and you are providing all their legal advice – not an uncommon scenario – you have to do just that: all of it. Not providing all of it is to risk losing all of it.

The accountants, by contrast, most often conflated in the ill-fitting made-to-measure suit that nobody really wants called ‘Professional Services’, quite literally cannot provide all of their services to the company. You cannot be Audit and Tax advisors to the same company. Period. Thanks Enron! But even when you could, your Devilish Accountamancy would only cover all the financial and business infrastructure of your client company.

Lawyers do not have that luxury. Acting for a small manufacturing company, say, you’d be providing Corporate advice for the company’s acquisitions or disposals, a range of Commercial services, things like Intellectual Property, Data Privacy and Tax. You’d have to be able to advise on Property, including Planning, when the company wanted to expand. Possibly Environmental law when it wants to reclaim that old, contaminated bit of the site. And the people-related stuff – Employment law and Health & Safety being paramount, but also Pensions and Employee Benefits.

The curse of the law firm is the work tap all too-often isn’t constant. It’s not tax advisory work every week, or audit every year, or business consultancy on a continuous basis, but dipping in and out of this, maybe not having any meaningful interface between one part of your business (litigation, say) and the client for years, only for a “bet the farm” issue to crop up where all that client relationship management stuff will finally pay off.

If you want to be a true general service adviser, you have no option but to cover the waterfront and that is expensive, because you can’t staff your firm with generalist advisers; few lawyers can cover Corporate, Property and Commercial, for instance, and certainly not with any level of sophistication, and with very heightened risk. The more of a generalist you are, the greater the risk of missing something which could prove catastrophic, the further out of your depth you become as your client grows and becomes more sophisticated.

That is the conundrum for Law, it’s what keeps lawyers up at night, and as the sector has developed, many traditional general service firms have gone out of business or been forced into mergers by larger, more sophisticated rivals able to do everything bigger and better, and to keep developing every aspect of their offering in line with market changes.

At the same time, a few specialist disciplines have developed to the extent that niche or super-niche practices have come into being. It’s difficult to maintain a top class Pensions practice in London, for instance, when there is a super-niche Pensions firm packed with many of the stars of the sector to which you can effectively sub-contract the work without any fear of losing other bits of the business you provide to your client. That allows clients to more effectively pick-and-mix their services, but it takes a sophisticated buyer to get the best out of this, and few do it that well, efficiently or effectively, especially outside Big Business.

In any other industry, the choices would be clear: get rid of all the non-core business and focus on the core. But in law firms this can be a disaster. Corporate lawyers, for instance, positively loathe being ‘sectorised’, both for practical and philosophical reasons; the net effect is that you cannot build a corporate practice focused on a single sector or even two or three sectors to the exclusion of other things that might float along the stream.

So here, we can see that even dipping a toe in the water and aiming for Focus is a bedevilling experience for law firms. The apparent incoherence plays out in virtually every law firm claiming to pursue a ‘sector strategy’, with – to the naked eye – such law firms seeming to be nothing more than a collection of sectors which have little or nothing to do with one another, the very antithesis of Focus.

What to do, then? To Focus or not to Focus? As with any complex problem, there are no simple solutions. Insurance, to use our example, has become a graveyard for law firms which have tried differing strategies to cope with a Perfect Storm of market pressures and the changing nature of the sector.

The truth is that there is no one answer, no magic bullet. Every law firm is faced with its own scenario, with little to be gained from “how others do it” beyond some really obvious generalities – smarten up your processes, for instance.

The best focus you can attain is a sharp focus on your own scenario, its particular stresses and strains, its requirements and opportunities, and the willingness to face the truth of your circumstances and to take the hard decisions which might be required.

Yes, focus is all, but make sure you’re focusing in the right place.